WASHINGTON, DC -- "While we are not against tax cuts that will generate economic growth, we don't feel like we should be cutting taxes until we balance the budget," said Congressman Collin C. Peterson (DFL-7th District). "That's why The Coalition has joined with The Tuesday Group, a group of moderate Republicans, to get an amendment passed that says just that."
The amendment will allow the House to pass the tax cuts, but those cuts would not go into effect until the Office of Management and Budget (OMB) certifies that because of action taken by the Congress, the budget will be balanced by the year 2002. The year after that certification, the cuts can go into effect.
"The OMB could do that this year, or next year, or the next year," Peterson said. "Once the OMB says that because of what the Congress has done, we are on the right track towards balancing the budget by 2002, then the next year the tax cuts go into effect.
"And we must stay on the road towards deficit reduction. If the deficit, including the tax cuts, exceeds a benchmark level set in the amendment, then the cuts will be suspended immediately," Peterson continued. Those benchmark levels are $150 billion in Fiscal Year 1996, $125 billion in FY 97, $100 billion in FY 98, $75 billion in FY 99, $50 billion in FY 2000, and $25 billion in FY 2001.
"There are close to 50 members from both sides of the aisle working on this amendment, and I think that shows the amendment's importance," Peterson said. "The moderate Republicans, to their credit, decided they would not support a process that put tax cuts before deficit reduction. Following that move, the Republican leadership came to our group, The Coalition, and asked us to support the tax bill. We refused, and our two groups now will work to make sure that this Congress doesn't jeopardize balancing the budget for tax cuts. We want to make sure this country doesn't end up like we did in the 80's after getting plenty of tax cuts but building up a huge budget deficit."